There was a time, back in the 20th century, when everyone wanted to have their own online shopping cart system. By 1997, Amazon.com had served their millionth customer and was really starting to impress regular folks. The internet looked like a realistic way to do business, maybe even for small businesses.
So soon everyone wanted a shopping cart, got one ready to go, and… nothing. They didn’t get any traffic. Then came the website submission hounds with programs like SubmitWolf. It worked for a time, though some submitters turned into spammers and thus began the game of cat and mouse between spammers and search engines.
As the number of websites grew, and around 2000 when Google, who had partnered with RedHat and Yahoo, began to become a real force, it was no longer enough to have a website and submit it… at least not for small businesses online. Sure, about $66 billion dollars in in goods was sold online in1999, but mostly by big players who already had bricks and mortar momentum. If the new guy on the block wanted a piece of the action, he had to get smart and stay smart.
Cue the SEO experts, a growing herd of geeks with a profusion of theories about the directories and search engines. Some search engine optimizers were ethical and followed the rules set by search engines. Others practiced “black hat” SEO. The search engines guarded closely how they rank pages but some SEO devotees put all their energy into trying to reverse engineer those algorithms, to discover the magic formula, and find holes, however temporary, to exploit.
By the dawn of the 21st century, some basic “white hat” SEO principles had solidified, and the fad had shifted from shopping carts to informational websites. You can’t optimize something that doesn’t have information, and the more you have the better. Also, a lot of internet junkies prefer the purely digital and neither had, nor wanted to have, any physical products to sell.
But digital purists need money too, so various revenue sources have been explored – from running advertisements (clunky old banners and the dynamic AdSense variety), to helping others sell their goods through affiliate programs, to developing their own digital goods, like ebooks, special reports, even programs and web utilities. These paths have already been trailblazed, but you still must to choose the best one for you. If you have a product, you’ll want to use the internet to sell it. If you don’t have one, you could develop one. If you don’t want to, sell other people’s. If you don’t want to do that, just run ads.
Let’s forget, for the moment, that these all depend on incoming web traffic, and just focus on the pros and cons of each revenue source:
The 5 Best Revenue Models in E-Commerce History
1. Selling physical goods requires warehousing, shipping, returns, and heavy customer service. It’s a significant investment of time and/or money, but this has the highest revenue potential.
2. Just running ads is much less work, especially with if you don’t have to deal directly with the advertisers. However, the earnings per click are quite low, so you need a lot more traffic to make good money. And not all informational topics are profitable. For example, searchers for entertainment and sports information don’t tend to click on ads or buy anything.
3. When you promote other people’s goods as an affiliate, you sit between the last two options- it can pay better than ads and be less hassle than hard goods. But you still have to provide content on profitable topics, and you need to be a comfortable and effective salesperson for the products that pay your bills.
4. Developing and selling your own digital products is at least as much work as selling hard goods, but requires much less overhead. You can write an ebook, turn it into a pdf, and get it onto a website with very little money.
5. And we shouldn’t end without mentioning that you can also sell your services online. If you write about what you do, whether you’re a web designer, lawyer, doctor, psychologist, carpenter, whatever, you can get web visits from prospects in your local area and turn those people into customers.
Article ID: 274, Created On: 11/17/2010, Modified: 12/9/2010